Good afternoon, Mr. Chairman, Senator Mikulski, and members of the Subcommittee. I appreciate the opportunity to appear before you today to discuss the President's FY 2007 budget for the Federal Bureau of Investigation.

I also would like to thank you for passing the FY 2006 Katrina supplemental which included $45 million for the FBI. Our employees in the Gulf region endured great suffering and devastating property loss in the aftermath of Katrina. In addition to the horrific personal toll the storm took on the people of the Gulf region, the FBI offices in New Orleans, Beaumont, Gulfport and Pascagoula were either severely damaged or completely destroyed. However, your funding is helping to rebuild our offices, put our employees back to work, and enable us to bring our capabilities back to pre-Katrina levels.

With this Committee's help, the FBI was able to establish Katrina Fraud Task Forces, in Lake Charles and Lafayette, Louisiana, to investigate and prosecute those unscrupulous individuals who seek to benefit from this national tragedy. We intend to continue this important work as the Gulf region recovers.

2007 Budget Request

The FY 2007 budget totals 31,359 positions and $6.04 billion. The net FY 2007 program increases total 75 positions. Our FY 2007 budget is focused on enhancing and improving our infrastructure. Since September 11, the FBI has undergone significant reorganization and tremendous personnel growth. However, FBI Headquarters (HQ) facilities and infrastructure programs have not kept pace with our transformation from a law enforcement entity to a key player in the government’s war against terrorism.

As an agency, we must find the proper balance between expanding our workforce and supporting on-board employees with the technology and infrastructure necessary to accomplish our dual mission as both a law enforcement and an intelligence entity. I believe the FY 2007 budget will go a long way in rectifying the gaps between our rapid growth in personnel and our current infrastructure.

Improving Physical Infrastructure

The FBI's space for handling and storing classified information is currently inadequate. We are formulating a strategy to address sensitive compartmented information facility (SCIF) space requirements. The primary objective of the FBI's plan is to provide SCIF space and SCI connectivity to key national security field facilities by the end of calendar year 2007, which will be accomplished using resources requested in the FY 2007 President’s budget.

In FY 2007, the FBI is requesting $33 million in construction funding for SCIF expansion. This funding would allow for information sharing between the FBI and our partners within the intelligence community (IC), as envisioned by the President and Congress. Without this SCIF expansion, the FBI cannot ensure an adequate intelligence infrastructure to achieve our strategic goals. In the FY 2006 conference report you requested that we develop a plan to prioritize our SCIF expansion program. This report is currently under administration review and we look forward to discussing it with the Committee once it is released.

We are also requesting $8.8 million to acquire additional space for an FBI Headquarters annex, which would be located in the Washington, D.C., metropolitan area. Most of FBI's Headquarters components operate in fragmented and overcrowded office space. The FBI must secure an additional 150,000 square feet of useable space in order to accommodate the needs of new personnel coming on-board through FY 2007.

The current FBI Academy training facilities located at Quantico, Virginia, areinadequate to address the training needs of our analysts and special agent personnel. Most of the Academy's facilities were designed in the late 1960s to accommodate small groups in a traditional classroom training setting. However, given the FBI's growth and dual mission requirements, the Academy can no longer support our expanding needs or provide us the forum to develop a world-class cadre of intelligence professionals.

After the September 11 terrorist attacks, the FBI developed and implemented professional training for intelligence analysts (IAs) throughout the FBI. In October 2001, the Center for Intelligence Training (CIT), formerly known as College of Analytical Studies, was established at the FBI Academy. The CIT was established to improve theFBI's analytical capabilities to meet our present and future investigative responsibilities.

All courses delivered by the CIT are designed to support the FBI's counterterrorism, counterintelligence, and analytical missions. The CIT experienced significant growth during its first years of operation and, based on expected hiring levels of new IAs, the FBI expects the CIT to continue to expand its operational and training missions.

In the FY 2007 budget, we are requesting $6.3 million to upgrade our CIT facilities by beginning the process of designing the CIT training center at the FBI Academy complex in Quantico, Virginia. The CIT will be a major element in continuing to promote and develop the FBI's leadership training for FBI-wide, state/local, andinternational law enforcement personnel.

We are also requesting $11.9 million for interim space at the FBI Academy for the FBI's hostage rescue team (HRT). Although HRT's current space was built to accommodate only 50 employees, there are currently more than 200 staff members using this limited space.

As with many FBI units, HRT's responsibilities have increased enormously since the September 11 terrorist attacks. Over the past three years, the HRT has been deployed on 159 occasions, of which over 62 percent were related to counterterrorism. The HRT was also utilized in support of search and recovery efforts in the aftermath of hurricanes Katrina and Rita. Much of HRT's work is sensitive in nature and must beconducted in a secure area.

Information Technology

We continue to upgrade and enhance our technological infrastructure. In our FY 2007 budget, we are requesting $100 million for Sentinel. Sentinel will leverage technology to reduce redundancy, eliminate inefficiencies, and maximize the FBI's ability to use the information in its possession.

Our objectives for Sentinel include the following: (1) Deliver a set of capabilities that provide a single point of entry for investigative case management and intelligence analysis; (2) implement a new and improved FBI-wide global index for persons, organizations, places, things, and events; (3) implement a paperless informationmanagement and work-flow capability; and (4) implement an electronic records management system.

I want to stress that the Sentinel program is not a reincarnation of the Virtual Case File. In the past few years we have struggled with our information technology programs. However, we have learned hard lessons from our missteps and we are doing things very differently this time.

Each phase of the Sentinel contracting process is being closely scrutinized by a team of FBI technical experts, the Government Accountability Office, the Office of Management and Budget, and the Department of Justice’s Chief Information Office and Inspector General. Furthermore, at this Committee's recommendation, we have alsoengaged outside experts to help us review and assess the implementation of Sentinel.

On March 16, 2006, we announced the award of the contract for development of the Sentinel to Lockheed Martin. Under the terms of the $305 million, 6-year contract, Lockheed Martin and its industry partners will use proven commercial off-the-shelf technologies to produce an integrated system that supports processing, storage, and management of the FBI’s current paper-based records system. The program includes an incremental development and delivery of Sentinel capabilities, including $73 million for operations and maintenance activities.

Now that the contract has been awarded, we are moving forward with phase one of the development process. Each of the four phases will introduce new stand-alonecapabilities and will be user-focused. As each phase is implemented, existing information will be transferred to new systems and old legacy systems will be retired. As a result, Sentinel will replace a number of legacy applications including: Automated Case Management System; ASSET; Criminal Informant Management System; Bank Robbery Statistical Application; and Financial Institution Fraud and Integrated Statistical Reporting Analysis Application.

I will continue to update this Committee on the progress of Sentinel and I expect and welcome your strong congressional oversight of this program.

NGI and IAFIS/IDENT Interoperability

We are also requesting funding for major enhancements to our Integrated AutomatedFingerprint Identification System (IAFIS). IAFIS is the 10-rolled fingerprint identification system that was successfully deployed in 1999 and is used by federal, state, and local law enforcement and authorized non-criminal justice agencies to identify subjects with criminal-history information. While IAFIS was a state-of-the-art system at its inception, technology has since advanced, and we must update IAFIS in order to meet the needs of our customers.

The FBI intends to meet these new requirements by implementing a Next Generation Identification (NGI) system. We are currently conducting a comprehensive requirements study that will produce an implementation/strategy plan, baseline systems requirement document, functional requirements document, and requirementtraceability matrix.

Once we have completed the planning effort, we will design, develop, and implement modular builds with each module providing improved functionality, such as improved accuracy and speed. The FBI is requesting $38 million to support development of NGI.

Along with improvements to IAFIS, the FBI is developing interoperability with the Department of Homeland Security's Automated Biometric Identification System (IDENT). DHS's IDENT program is a two-flat fingerprint identification system. Various legislative acts have required the FBI and DHS to ensure that the systems are interoperable and that the criminal and immigration information that they contain is accessible to, and shared among, other federal, state, and local law enforcementagencies.

In 2002, the FBI began providing DHS with extracted, partial data from IAFIS. This is a temporary solution until full interoperability can be achieved.

Interoperability efforts between IAFIS and IDENT are advancing. A multi-agency interoperability integrated project team (IPT) was established to address the problem. In June 2005, FBI Criminal Justice Information Services, DHS United States Visitor and Immigrant Status Indicator Technology and the Department of State signed a charter which established cooperative guiding principles for IPT. IPT is aggressively pursuing different interoperability models to find a solution to the problem. For FY 2007, the FBI is requesting $33 million to purchase hardware, software, and contractservices to support this interoperability initiative.

Human Resources

During FY 2005, this Committee provided the FBI with the legislative authority and resources to help us compete with other homeland security and intelligence community organizations who often recruited employees away from the FBI. The funding allowed us to provide recruitment bonuses for potential new hires, retention and relocation bonuses to existing employees with job offers from other government entities, and increased funding for our university education program and student loan repayments.

Thanks to your support, the FBI used approximately $22 million for these purposes during FY 2005, including almost $5 million on recruitment initiatives, $1.6 million on employee retention and relocation bonuses, and $14.9 million on degree programs and student loan repayments.

The additional funding this Committee provided as an extension of these authorities is allowing the FBI to extend relocation bonuses to agents assigned to high-cost-of-living offices. Each of these incentives is providing us with the leverage to retain a high-caliber workforce to better serve the nation in our fight against terrorism.

Additionally, this Committee provided for the establishment of our sabbatical program. Last year, the FBI sent participants to the St. Andrews Program for InternationalSecurity Studies and to Harvard's John F. Kennedy School of Government.

This year, we added several new partners to our Sabbatical Program and are able to provide opportunities for FBI employees to attend Mercyhurst College; the George C. Marshall Center; the National Defense University; the Naval Postgraduate School; the Marine Corps University; and the Naval War College. Students will benefit from receiving various certificates and degrees ranging from applied intelligence to national resource strategy.

The FBI is developing programs designed to recruit, train, develop, and retain professionals who have the skills necessary for the success of its national security missions. Among these workforce programs are the special agent career path and the ntelligence Career Service. These programs are designed to enhance the national security workforce and to create training and development opportunities for agents, analysts, linguists, and surveillance specialists in the FBI's national security programs. Last year, the FBI trained 589 new agents and over 1,000 Intelligence Career Service professionals.

The FBI will expand current in-service and virtual intelligence training initiatives for FBI employees and our partners in other federal, state, local, and tribal agencies. Efforts are underway to assess our training and to develop the capabilities we need as we go forward. Revisions to new agents and cohort training programs are also underway. We are requesting $5 million in FY 2007 to provide advanced intelligence training curriculum development and $1 million to establish our intelligence officer certification program.

National Security Branch—T/CI/DI

Over the past four years, the FBI has developed its intelligence capabilities and improved its ability to protect America from threats to national security. We have built on our established capacity to collect information and enhanced our ability to analyze and disseminate intelligence. Implementation of the National Security Branch (NSB) is the next step in the FBI's transformation.

On June 28, 2005, in response to the findings of the Commission on the Intelligence Capabilities of the United States Regarding Weapons of Mass Destruction (WMD Commission), President Bush directed the FBI to create a "National Security Service" within the FBI. The FBI implemented this directive through the creation of a new entity—the NSB—that integrates the FBI's primary national security programs under the leadership of a single executive assistant director and through policies and initiatives designed to enhance the capability of the entire FBI to support its national security mission.

The mission of the NSB is to optimally position the FBI to protect the United States against weapons of mass destruction, terrorist attacks, foreign intelligence operations, and espionage by integrating investigative and intelligence activities against current and emerging national security threats; providing useful and timely information and analysis to the intelligence and law enforcement communities; and effectively developing enabling capabilities, processes, and infrastructure, consistent with applicable laws, attorney general and director of national intelligence guidance, and civil liberties.

The FBI's NSB was established and is making significant progress in integrating the missions, capabilities, and resources of the counterterrorism, counterintelligence, and Directorate of Intelligence (DI) programs. The NSB builds on the success of the DI and other initiatives already underway by helping to integrate the FBI's intelligence mission more fully into the FBI and into the IC, so that the IC can better understand FBI operations, while enhancing the FBI's ability to protect the nation.

The NSB essentially puts one face on the FBI's intelligence mission to stakeholders, including Congress, other IC agencies, and the general public. The FBI is currently working with the Department of Justice and the administration to ensure that the NSB meets the directives set forth by the President and is responsive to the Office of the Director of National Intelligence.

A major part of our counterterrorism work has been supporting the war on terror overseas in Iraq and Afghanistan. The FBI's responsibility there is to protect U.S. interests and persons from terrorist attacks by conducting investigations and acquiring intelligence that would prevent, disrupt, and defeat terrorist operatives targeting America. The U.S. military and IC are partners with the FBI in this mission.

As a result of our intelligence gathering overseas, IC reports indicate al Qaeda has declared its intent to execute a WMD attack against the U.S. A successful attack using a WMD device consisting of a chemical, biological, radiological, or nuclear payload would have catastrophic consequences. Preventing the detonation of a WMD device through an effective, coordinated, and technically proficient response program is an FBI responsibility defined by Presidential Decision Directive-39. The FBI is requesting $25.8 million to provide resources to respond to terrorist threats and incidents such as WMD and other explosive devices.

The DI oversees the field intelligence groups (FIGs). FIGs are central to the integration of the intelligence cycle into field operations. The FIGs coordinate, manage, and execute all the functions of the intelligence cycle. FIGs include special agents and intelligence analysts as well as officers and analysts from other intelligence and law enforcement agencies.

The establishment of FIGs in every field office during October 2003 and the issuance of initial guidance for their operations laid the groundwork for enhancing the FBI’s intelligence capability in the field. From January 2004 through January 2006, intelligence analyst staffing increased on the FIGs 61 percent, from 617 to 995.

Work will continue with the implementation of a plan to more fully integrate the intelligence cycle into FBI field operations through standardized processes, pilot implementation projects, specialized training, and refinement of roles and responsibilities. We have also assessed our field-wide intelligence collection capabilities to include human, technical, and physical collection posture. Our FY 2007 budget request reflects our need for resources to close gaps identified in our intelligence program infrastructure.

In addition to overseeing the national security operations of the CT, CD and DI, the NSB is also accountable for the functions carried out by the other FBI divisions that support the national security mission, such as language translation support and Field Intelligence Group program management.

Today's FBI linguist cadre is 69 percent larger than it was on September 11. The three languages with the largest growth are Somali, Pashto, and Turkish, each with an increase of over 400 percent. This growth was made possible by the resources provided by this Committee.

Another way we are providing support to counterterrorism and counterintelligence investigations is through the West Virginia Translation and Analysis Center. The center provides field offices with an alternative to processing their Foreign Intelligence Surveillance Act audio collections. Analysts at the center listen for pertinent English conversation containing intelligence material and provide English summaries and occasional full transcripts.

The National Virtual Translation Center (NVTC) is an excellent example of the continuous transformation efforts underway at the FBI: creative and aggressive recruiting; interagency resource sharing and collaboration; and streamlined methods for serving agencies across the U.S. government in support of the war on terrorism. The NVTC was established with CIA resources under the authority of the USA PATRIOT Act to provide accurate and timely translations of foreign intelligence material to the IC.

During 2003, the CIA awarded the FBI executive agency authority over the NVTC. Together with the CIA, we have recruited translators from the military and colleges and secured added assistance through civilian contract staff. We continue to benefit from the interagency sharing of translation resources, collaborative use of human and automated translation capabilities, and parity in translation workload across various IC elements.

$16 million for Intelligence Operations and Production. This funding will support initiatives that comprise the core intelligence processes that are aligned with the intelligence production cycle. This would provide five positions for human source validation, 52 positions for intelligence operations and production, FBIHQ operations and maintenance funding for the FBI's IIR Dissemination System, a human source validation system, and physical surveillance support.

Cyber

The cyber threat confronting the United States is rapidly increasing as the number of people with the tools and abilities to use computers against us is rising. The country's vulnerability is escalating as the United States economy and critical infrastructures become increasingly reliant on interdependent computer networks and the World Wide Web.

Large-scale computer attacks on the nation's critical infrastructure and economy could have devastating results. The Internet knows no boundaries. A perpetrator can sit at a computer anywhere in the world and gain unauthorized access to systems throughout the globe with complete anonymity. This puts law enforcement at a severe disadvantage and we must leverage all of our existing resources to bring cyber investigations to successful conclusions.

We must continue to increase our capability to identify and neutralize enterprises and individuals who illegally access computer systems, spread malicious code, or support terrorist or state-sponsored computer intrusion operations.

Since FY 2001, the FBI has seen a 906 percent increase in international terrorism, counterintelligence, and domestic terrorism computer intrusion cases. The FBI’s Legal Attachés are working closely with our international law enforcement and intelligence partners to combat this rising threat.

Legal Attaché Program

The FBI continues to expand its Legal Attaché (Legat) program. International cases have become the rule, rather than the exception, for the Bureau. Legats are a key component of our extraterritorial law enforcement effort and often provide the first response to crimes against the United States that have an international nexus.

Legats also provide a prompt and continuous exchange of information with foreign law enforcement. But Legats are no longer just information conduits. Rather, these offices assist our counterparts overseas on joint investigations, intelligence-sharing, and the development of new methods to prevent terrorist attacks.

This year we plan to open six more offices, located in Afghanistan, Qatar, Sudan, South Africa, Algeria, and El Salvador, and convert two sub-offices—Port-of-Spain and Jakarta—to fully operational Legats. The San Salvador Legat office is being opened with the support and resources provided by this Committee for the intended purpose of working with El Salvador's law enforcement to target the MS-13 gang's leadership in one of its Central America strongholds.

Criminal Programs

Although much of my testimony has been geared toward a discussion of the FBI's national security efforts, we continue to take great pride in our criminal programs. As with all of our investigative efforts, these criminal programs are in concert with the attorney general’s priorities, as announced earlier this spring.

Specifically, as I mentioned earlier, we are aggressively pursuing any Katrina-related criminal fraud. The Attorney General has asked the United States attorneys’ offices to adopt a "zero tolerance" policy toward all cases involving hurricane relief related fraud. To date, over 150 investigations have been initiated and over 100 individuals have been indicted on corruption and fraud-related charges.

Public corruption is the top criminal priority for the FBI. The FBI's highly sensitive public corruption investigations focus on all levels of government. The heightened focus has helped increase both the number and quality of the cases being investigated. Over the last two years, FBI investigations have led to the conviction of more than 1,060 government employees involved in corrupt activities, to include 177 federal officials, 158 state officials, 360 local officials, and more than 365 police officers.

We also continue our work refining and implementing the national gang strategy (NGS). Developed in 1993, the goal of the NGS is to identify the prolific and violent gangs in the United States and to aggressively investigate, disrupt, and dismantle their criminal enterprises through prosecution under the federal racketeering statutes and other appropriate laws.

I know the escalation of gang violence is an area of particular concern to this Committee and the FBI appreciates the efforts and resources you have provided to law enforcement to attack this growing problem. With your help, in 2005, the National Gang Intelligence Center was formed to allow state, local and federal agencies to share gang data across jurisdictions and identify trends related to violent gang activity and migration.

This multi-agency center functions from the Washington, D.C., area and has coordinated information sharing with other investigative and intelligence operations of local, state, and federal criminal justice agencies, and has become a national center for case coordination and information. The gang information provided by federal, state and local agencies is one of the most vital aspects of this center for the successful integration and sharing of data.

Another area of concern for the FBI's Criminal Investigative Division is the escalating level of violence in the Southwest border region. The recurring violence on the Southwest border revolves around the Gulf Cartel drug trafficking organization, which has traditionally dominated the region and commanded smuggling operations along this stretch of the border.

The FBI is taking proactive measures to assess and confront this threat to public safety on both sides of the border through participation in multiple bi-lateral multi-agency meetings, working groups, and enforcement operations. The FBI, along with DHS, the Drug Enforcement Administration, and the Department of State, are working with the Mexican attorney general's office to identify Gulf Cartel members and is using all available techniques to disrupt and dismantle this dangerous organization and reduce the violence in the Southwest border region.

Conclusion

Mr. Chairman, Senator Mikulski , and members of the Subcommittee, today's FBI is part of a vast national and international campaign dedicated to defeating terrorism. Working hand-in-hand with our partners in law enforcement, intelligence, the military, and diplomatic circles, the FBI's primary responsibility is to neutralize terrorist cells and operatives here in the United States and help dismantle terrorist networks worldwide.

Although protecting the United States from terrorist attacks is our first priority, we remain committed to the defense of America against foreign intelligence threats as well as enforcing federal criminal laws while still respecting and defending the Constitution.

This year will mark the five-year anniversary of September 11. The FBI has changed dramatically since the terrorist attacks and we will continue to evolve to meet the emerging threats to our country. We have expanded our mission, radically overhauled our intelligence programs and capabilities, and have undergone tremendous personnel growth.

With the FY 2007 budget request, in order to capitalize on these changes and our past investments in personnel, we intend to bridge the gap between our growth and infrastructure by focusing on updating our technology and facilities.

Once again, I thank you for your continued support of the FBI. I am happy to answer any questions you may have.